Why Krispy Kreme Doughnuts, Leidos Holdings, and Sears Holdings Dropped Today

Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.

December hasn't been kind so far to the stock market. Major indexes fell again today as concerns about the early part of the holiday season and the implications for Federal Reserve policy going forward have investors questioning whether the big market rally in 2013 has gone too far too fast. Several stocks added to the negative mood on Wall Street today, with Krispy Kreme Doughnuts (NYSE: KKD  ) , Leidos Holdings (NYSE: LDOS  ) , and Sears Holdings (NASDAQ: SHLD  ) all dropping much more dramatically than the broader indexes. Let's look for clues about why these stocks fell so hard today.

Krispy Kreme dropped 20% as investors didn't get as much growth as they had hoped for from the restaurant chain. Krispy Kreme delivered solid results for the third quarter, with positive comps of 3.7% helping to produce better-than-expected earnings. Yet with the company projecting lower earnings for the 2015 fiscal year than shareholders had hoped, the donut-seller wasn't able to sell investors on the idea that boosting store counts abroad is worth the hit to same-store sales in the international segment that its expansion efforts will produce. If the company returns to its growth trajectory, then today's drop could make for an attractive entry point going forward.

Leidos declined 15% as the company disappointed investors with poor preliminary results for its current quarter and cut its guidance for the full fiscal year. Leidos, which is the surviving entity after spinning off IT government-services specialist Science Applications International (NYSE: SAIC  ) earlier this year, has looked to capitalize on the high growth potential from health-care and national security solutions. But slashing 2014 earnings and operating cash flow projections roughly by half isn't a mark of confidence for Leidos, which faces some substantial short-term challenges despite its long-term potential.

Sears Holdings fell almost 8% as the retailer's uninspiring holiday-weekend sales figures didn't raise confidence in the stock's future prospects. With online retailers posting impressive Cyber Monday results, Sears might well have gotten a smaller piece of a shrinking pie, with National Retail Federation figures pointing to a sizable decline in spending over the Thanksgiving weekend. Lately, Sears has performed best when it comes up with ways to unlock value irrespective of its retail operations, and even the stock's supporters don't seem to have high hopes for Sears as a retailer.

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